Critical Metrics for Your Business Website, part 2

 Second part of the critical business metrics series from the Bear Creek Web Blog:

In our last blog post on business website metrics, we talked about the top of the funnel. Metrics like Cost per Acquisition and Cost per Lead help companies evaluate whether or not their inbound marketing efforts are performing as expected.
More importantly, top funnel metrics offer a clear way to understand if an inbound marketing channel is viable from a financial standpoint – i.e. making sure you don't spend more money to acquire customers than you earn when selling to them.
For this post, we're moving further into the funnel to discuss additional metrics on your business website that can reveal problems in conversion and conversion flow. We'll also talk about some of the methods for optimizing mid-funnel metrics to ensure the greatest ROI.

Essential Mid-Funnel Metrics for SMBs

Problems with mid-funnel metrics are all about "the one that got away" in terms of conversions. Understanding where, how, and why users don't complete the conversion flow is critical to both improving customer experience and your bottom line.
The key mid-funnel metrics for business websites are bounce rates, abandonment rates and the time to purchase or project close.

Bounce Rates

Bounce rates measure the percentage of website visitors who visit only one page and then leave your site. Bounce rates are seen as an indicator of engagement – the more people who visit multiple pages on your website, the better your engagement. High engagement equates to better user experience and a greater chance for conversions.
Generally speaking, you want to get your bounce rates as low as possible. However, high bounce rates are not always indicative of problems with engagement.  For example, it is not uncommon for visitors to read a single blog post on a website – particularly when the visitor is in the research stage of the buying cycle. Focus bounce rate concerns on areas such as landing pages, where users are expected and encouraged to move deeper into the site. High bounce rates on these types of pages indicate that you are not aligning messaging with user expectations.

Abandonment Rates

Abandonment rates can be calculated as a whole across the entire conversion funnel, or for individual pages. The overall abandonment rate measures the percentage of website visitors who leave your conversion funnel at any step before completing the conversion. The abandonment rate of a page measures the percentage of website visitors that leave your conversion funnel at that specific page.
Note that visitors don't have to leave your website to abandon the funnel. For example, if your conversion process requires filling out a 3-step contact form and a user clicks away from the form on step 2 in order to view your services webpage, that user has abandoned the conversion funnel.
Your goal when analyzing abandonment rates is to pinpoint any areas where there are significant drop-offs in the number of users who continue through the conversion flow. Pages that have high abandonment rates when compared to other pages in the funnel most often indicate a need to adjust messaging and/or design.

A Word about Conversion Funnels and Google Analytics

Google Analytics can provide valuable information on the performance of your conversion funnels, but you have to set them up, first. Google created this helpful post that explains how to set up goals in Google Analytics. It's important to note that Google Analytics will only track conversion funnel metrics going forward – meaning you won't get data on conversions that happened before you set up your goals.

Time to Closing/Sale

As you look at conversion rates for your website, it is helpful to take it a step further and look at the conversion timeline. The time to closing/sale is the average amount of time it takes from the first visitor interaction to a completed conversion or sale. This is typically broken down along inbound marketing channels. For example, you may want to compare the time to closing or sale between website visitors who first reach your site through organic search versus pay per click advertising.
The amount of time it takes to close a sale can be a powerful indicator as to the effectiveness of your conversion funnel. Website visitors that are targeted with the right information at the right point in the sales cycle are more likely to convert. Additionally, if you notice that it's taking your sales team longer (or shorter) to convert leads into sales, this is an important indicator about the quality of your inbound marketing efforts.
Ideally, you want to have a time to closing/sale that is within a reasonable time frame for your business. If you notice sales cycles getting longer, you may need to adjust your messaging, your delivery, or both.
Optimizing Mid-Funnel Metrics
If you do notice a significant drop-off at a specific stage (or stages) of the conversion funnel, how do you fix it? The first option is to consider the necessity of the steps in your funnel. Can you eliminate those one or two areas that are causing users to abandon the funnel? If so, you should test a new conversion funnel that removes those steps and see if it performs better than the original.
If you find that you do need to keep all steps within your conversion funnel, there are still ways to optimize:

Message Alignment
Make sure that the messaging for each step is consistent with the expectations of the user. Some steps may require more information to make users feel comfortable with proceeding. Others may require less information to keep users from feeling bogged down. Try to give visitors only the amount of information they need to progress through the funnel, no more and no less.
User Experience
Design is also an important factor in mid-funnel metrics. Are your calls-to-action (CTAs) clearly defined and readily visible? Does your site layout help users find what they need to proceed? Are images relevant and helpful? All of these questions come into play when optimizing a conversion funnel.
A/B Testing
Sometimes, problems are readily apparent once you start looking at your conversion flow from the perspective of a potential customer. However, it is often the case that it is unclear what changes would make for a better overall user experience. This is where A/B testing comes in. This form of testing focuses on making one major change to a page within your conversion funnel. For example, you may change the headline and body copy for one landing page to see if the change in wording improves conversions. In A/B testing, you would direct a certain percentage of web traffic to the new page and a certain percentage to the old page and compare conversion results between the two groups.
By testing two different versions of the same page, you can determine if the changes you make to your webpage are having a positive or negative impact on overall conversions.
Multivariate Testing
Changing multiple areas of a page in order to optimize performance is called multivariate testing. When using multivariate testing, many areas of a page can change. For example, you might change not only the copy, but the colors for the font and the images used on the page as well. Testing is handled in a similar way to A/B testing, with a certain percentage of web traffic seeing the new page and results being compared between new and old pages to determine which is best.
Testing and optimization of your conversion funnel will reduce bounce rates and abandonment rates, but the time it takes to close the deal is still very much dependent on the sales team.  Establish guidelines for follow-up, and if you notice a lot of unqualified leads to your site, it may be time to adjust your inbound marketing efforts as well.

If you need help understanding what to optimize or how to optimize your mid-funnel website metrics, let us help. Our team of online marketing experts will be happy to help you optimize and grow your business.
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Critical Metrics for Your Business Website, part 1

From our Blog on Bear Creek Web:

Traffic sources, backlinks, time on page, bounce rates, and more – small business owners and professionals are often drowning in a sea of available metrics.
In our personal experience working with small business owners and professionals across multiple industries, we've found that while most small business owners know that metrics tracking is important to their business, less than a quarter actually understand which metrics to track and how to do so effectively.
We've put together this three-part blog series to cut through the noise and help you get to the information that matters for your business website. Our first post discusses inbound metrics – the cost of acquiring customers. We'll follow up with mid-funnel metrics and wrap up with a discussion on key retention metrics to help you hone your online marketing strategy.
Along the way we'll also highlight some basic terms that are important to understand as you work on optimizing your business website.
Before we begin, it's important to note that this type of data tracking involves some offline work – generally in the form of an Excel spreadsheet to calculate metrics. You may also want to look at paid analytics services which can perform a more detailed analysis of your metrics and let you skip the spreadsheet altogether.

Essential Top Funnel Metrics for SMBs

The top of the funnel is where all visitors start, before they become leads, clients or customers. While having high traffic numbers to your website can make it seem as though the top of your funnel is doing fine, you need to dig deeper in order to gain an accurate picture of how your business is performing.
The two key metrics you need to track here are the Cost per Customer Acquisition, and the Cost per Lead.

Cost per Customer Acquisition (CPA/CPCA)

If your company sells products, you can figure out how much it costs to acquire each sale with a simple formula. The cost per customer acquisition is simply the cost of any inbound channel, divided by the number of customers acquired.
For example, let's assume that you use pay-per-click (PPC) advertising for your business website. Your average cost-per-click (CPC) is $1.00, and your average inbound conversion rate is 20%. So, for every $100.00 you spend, you get 20 new customers. This means your cost to acquire each customer $5.00 ($100 ÷ 20 customers).
If the sales price of your product is greater than $5.00 then your cost per acquisition is turning a profit. If the sales price of your product is less than $5.00 then it's costing you money to get customers.
Of course, you'll also need to factor in any additional costs such as labor and shipping to get a true idea of the profit or loss, but this is a good gauge of how well your inbound channels are performing.
If your company sells services, then you have a few more steps.

Cost Per Lead

Let's change the scenario above and assume that you aren't selling a product, but are acquiring leads to sell your service. Your inbound conversion rate of 20% is tied to the number of users who fill out a form to have your sales team get in touch. Let's further assume that you have a very good sales team in place, and 80% of leads who contact you end up making a purchase.
So, out of the 20 leads you receive for your $100 investment, you are able to convert 16 people to sign up for your service. Your cost per lead (CPL) is $5.00. However, your cost per customer acquisition (CPCA) is $6.25.
We calculate this by taking the $100 in marketing spend and dividing by 16 – i.e. the number of people who signed up for services. As you can see, the CPCA for a services-based business is highly dependent on the effectiveness of the sales team – take the closing rate down to 45% in this scenario and the CPCA goes up to $11.11.

Putting Inbound Metrics into Perspective

If your CPCA is higher than expected, you may find that that your website traffic numbers are costing you money – particularly if your PPC campaigns are not performing well. If that is the case, follow these four steps to reduce costs and eliminate unprofitable ad spend:

1. Review all paid campaign performance and adjust your spend to favor ads that perform well in terms of conversions versus clicks.
2. Reallocate funds to your top-performing platforms. For example, if you find you get greater conversions via LinkedIn or Bing, try increasing spend on these platforms to see if conversions continue to increase.
3. Look at paid keyword performance to optimize for SEO. Try to rank higher in organic search for terms that are driving paid conversions.
4. Minimize spend in areas that are not performing well. This may mean eliminating poorly performing ads, or it may mean reducing spend on certain types of campaigns such as mobile until you can optimize the user experience.

Understanding inbound metrics can seem daunting at first. However, if you narrow your focus to the metrics that matter to your bottom line, you'll have actionable insights that will help your business to grow.
If you need help getting a handle on important metrics for your business website, get in touch. Our team of experts is always ready to assist, and we'll help you to understand how your business is performing and what you can do to improve.
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